AMD expects 20% decline in gaming revenue from 'higher memory and component costs' in the second half of the year — CEO Lisa Su warns of further memory crunch
Source: Tom’s Hardware
(Image credit: Getty Images)
AMD announced its financial results for the first quarter of 2026, highlighting record revenue in the data‑center segment while warning of a further memory crunch on the consumer side. CEO Lisa Su said the company is “planning the business accordingly” as it braces for the impact of higher component and memory costs in the second half of the year.
Gaming Revenue Outlook
“We expect second‑half demand in gaming to be impacted by higher component and memory cost,” said AMD executive vice president and chief financial officer Jean Hu. “We now expect second‑half gaming revenue to decline by more than 20 % compared to the first half.”
AMD splits its business into enterprise, client, gaming, and embedded segments. The quoted decline refers specifically to gaming revenue—GPUs and consoles. Consumer demand in the gaming segment is partially offset by commercial demand for Ryzen laptops across the broader client segment.
Console Pricing Context
Gaming demand is especially sensitive given recent console price hikes:
- Microsoft increased the price of its Xbox Series consoles twice last year.
- Sony announced price hikes across all new PS5 models in March.
- Sony recently raised the price of refurbished PlayStation 5 Slim consoles by $100.
These price increases could be contributing to the projected decline in gaming revenue, or they may signal that further hikes are possible. The exact impact depends on how many consoles Microsoft and Sony ship in the coming months.
Data‑Center Revenue Expectations
While consumers may feel the memory squeeze, AMD anticipates strong growth on the data‑center side. The company expects data‑center CPU revenue to increase 70 % year‑over‑year in the second quarter, driven by rising AI demand. This outlook aligns with broader industry trends, such as Intel’s recent record‑high stock price following strong CPU demand.